Gold price languishes near daily low, bulls not ready to give up yet despite stronger USD

• Gold price struggles to capitalize on its modest gains closer to a two-week high.
• The Fed's less dovish outlook underpins the USD and caps gains for the metal.
• Geopolitical risks and China’s economic woes should limit any meaningful slide.

Gold price (XAU/USD) attracts some intraday sellers following an uptick to the $2,049-2,050 area and drops to the lower end of its daily range during the early part of the European session on Thursday. The US Dollar (USD) climbs to a fresh high since December 13 in the wake of the Federal Reserve's (Fed) less dovish outlook on interest rates, which, in turn, is seen as a key factor acting as a headwind for the commodity. 

That said, the risk of a further escalation of military action in the Middle East, along with China's economic woes, could lend some support to the safe-haven Gold price. Apart from this, the ongoing downfall in the US Treasury bond yields might help limit the downside for the non-yielding yellow metal. Traders now look to the flash Eurozone CPI print, the Bank of England's (BoE) policy decision and the US macro data for a fresh impetus. 

Daily Digest Market Movers: Gold price struggles to lure buyers as USD hits fresh YTD peak on less dovish Fed

• The Federal Reserve signalled on Wednesday that it was getting closer to rate cuts and drags the US Treasury bond yields lower, which, in turn, is seen as a key factor lending support to the Gold price.
• As was expected, the Fed decided to leave the main interest-rate target unchanged at between 5.25%-5.5% at the end of a two-day meeting on Wednesday and indicated that the policy rate is likely at its peak.
• In the post-meeting press conference, Fed Chair Jerome Powell said that rate cuts would likely begin at some point this year, though pushed back strongly against expectations for any such move in March.
• The current market pricing indicates only about a 35% chance that the US central bank will cut interest rates in March, down from more than 60% before the Fed decision and nearly 90% a month ago.
• The less dovish outlook assists the US Dollar to climb to a fresh YTD peak, prompting some intraday selling around the non-yielding yellow metal and dragging it to the lower end of its daily trading range. 
• Investors remain worried that the deepening conflict in the Middle East could trigger a wider war, which, along with slowing economic growth in China, lends support to the safe-haven precious metal.
• The European Union hopes to launch a naval mission in the Red Sea within three weeks to help defend cargo ships against attacks by Houthi rebels, which are hampering trade and driving up prices.
• A private-sector survey released earlier this Thursday showed that business activity in China's manufacturing sector expanded at a steady pace for the third successive month in January.
• Traders look to the flash Eurozone consumer inflation figures, the Bank of England policy decision and the US ISM Manufacturing PMI for some impetus ahead of the US NFP on Friday.

Technical Analysis: Gold price bulls still have the upper hand above the 100-day SMA pivotal support

From a technical perspective, strength beyond the $2,040-2,042 supply zone could be seen as a fresh trigger for bulls. Moreover, oscillators on the daily chart have just started gaining positive traction and support prospects for additional gains. That said, any further move up beyond the overnight swing high, around the $2,056 area, is likely to confront some resistance near the $2,065-2,066 zone ahead of the $2,078-2,079 region or the YTD peak. Some follow-through buying should allow the Gold price to aim back towards reclaiming the $2,100 round figure and climb further towards the next relevant hurdle near the $2,020 area.

On the flip side, the 50-day Simple Moving Average (SMA), currently pegged near the $2,031-2,030 area, now seems to act as an immediate strong support and a key pivotal point. A convincing break below the said support could drag the Gold price to the $2,012-2,010 area en route to the $2,000 psychological mark. Some follow-through selling might shift the bias in favour of bearish traders and expose the 100-day SMA support near the $1,980 region, before the XAU/USD eventually drops to the very important 200-day SMA, near the $1,965-1,964 area.